As the debate rages in Lansing over the size and scope of
the 2004-2005 Fiscal Year state budget, the Mackinac Center for Public Policy is
republishing and updating budget cutting ideas from its March 2003 study,
"Recommendations to Strengthen Civil Society and Balance Michigan’s Budget."
The 2003 study made over 200 recommendations that, if adopted, could still
generate more than $2 billion in savings and one-time "revenue enhancements" for
the state General Fund/General Purpose (GF/GP) portion of the state budget. The
GF/GP is the area over which legislators have the most discretion. It’s
especially notable that none of these recommendations include any cuts to
revenue for the state School Aid Fund or the Michigan Education Assessment
Program, we recommend only a small cut to Medicaid revenue.

This report differs from the 2003 budget five ways. First,
it excludes most budget line items that would have relied primarily on federal
or special revenue funding. We made this change to simplify the report for our
readers and to emphasize the savings that could easily balance Michigan’s budget
without raising taxes — an imperative if Michigan is to compete effectively with
other states and nations for economic growth and development.

Second, this report is different from the 2003 budget study
in that it relies on both the Governor’s "as passed" 2004 budget data and her
proposed 2005 budget as sources. For instance, in the Agriculture section
of the 2004 update to "Recommendations to Strengthen Civil Society and Balance
Michigan’s Budget" you will find the entry:

Program:
Agricultural development, marketing and emergency management

Appropriation:

Interdepartmental Grants:

$500,000

Federal Funds:

$100,000

Special Revenue Funds:

$895,400

GF/GP:

$946,300

Total:

$2,441,700

All of the data in the format above is taken from House
Fiscal Agency (HFA) Line Item and Boilerplate Summaries released by the HFA in
September 2003. We used this source because it contains more useful information
than the proposed budget.

By contrast to the HFA data published last year, we
employed the Governor’s Fiscal Year 2005 proposed gross appropriation for each
line item so legislators could tell whether or not the appropriation increased,
decreased, or remained unchanged from the FY 2004 budget. The reader can find
this information at the end of each "Recommended Action" item in study.
Following is an example.

Recommended Action:

The Fairs and Expositions section of the state budget
should be eliminated. Savings: $17,295,900. Governor Granholm’s 2005
proposal decreases the gross appropriation to $16,801,300.

Third, the author has taken the liberty of highlighting
useful information by adding new italicized commentary within the 2003 text.
Following is an example.

Recommended Action:

To former Gov. Engler’s credit, he reduced the
appropriation for this program by 38.5 percent over the previous fiscal year
(ending in 2002), but Gov. Granholm could go further and remove the state
entirely from this program. Migrants have been finding satisfactory places to
live on their own accord since long before the state began inspecting and
licensing migrant housing in 1978. Author’s Note: Granholm did go further
than Engler, reducing the appropriation in FY ’04 by another 53.6 percent to
$255,000. Prior to 1978, every housing situation may not have been ideal —
from either the observers’ or migrants’ perspective — but that does not mean
people were worse off then as opposed to now, on net balance.

Fourth, the aggregate savings proposed by the Mackinac
Center for Public Policy in this document reflect neither the proposed savings
or proposed spending increases in Governor Granholm’s 2005 proposed budget.

Fifth, the Mackinac Center for Public Policy recommends
making other fundamental changes to Michigan’s budget landscape that did not
appear in the 2003 budget study. Those are detailed in the 2004 addendum at the
back of this volume.